Gold Bear Raid?
Commodities / Gold and Silver 2011 Jun 15, 2011 - 01:30 PM GMTBy: Brian_Bloom
I am not pessimistic on gold. I am a long term bull. But the charts are signalling that the gold price is facing risks.
It needs to bounce up from here in order to remain above its 50 day MA
(Charts reproduced from yahoo.com; Stockcharts.com, Decisionpoint.com)
If not, then $1480 next stop
MACD doesn’t look happy
MACD on weekly also looks like it wants to break down – reinforced by the position of RSI
$1410 looks like most logical support level
Relative strength chart (shares divided by bullion price) looking weak but also looks like it wants to bounce
Bounce may arise because shares are oversold
But look at the position of the 50 day MA relative to the 200 day MA. Crossover will represent a serious sell signal.
Conclusion
My interpretation of all of the above is that the gold price might consolidate whilst the shares bounce up. Thereafter, both may head south
In terms of the chart below, the absolute price below which gold MUST not fall is $1340. If it does, it will be extremely vulnerable to further falls – from a technical perspective only. It “could” come all the way back to $1050 and still be in a strong bull trend.
Under what circumstances might it fall to $1050?
In my view, the Fed and the world’s Central Banks are fighting to keep the world economy on life support. The world economy seems to be deteriorating. Best outcome would be a slow deflation (devoid of panic). Best way to avoid panic is to suppress the gold price. We might be facing a bear raid on gold.
By Brian Bloom
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Copyright © 2011 Brian Bloom - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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